Infant Formula Made in America Act of 2025

Bill Number

H.R. 2008

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Taxation

Status

Introduced

Latest Action

2025-03-10: Referred to the House Committee on Ways and Means.

Last Updated

2025-12-19T09:07:22Z

AI-Generated Summary

Purpose of the Legislation

The "Infant Formula Made in America Act of 2025" aims to boost domestic production of infant formula in the United States by offering tax incentives. It encourages companies to invest in new or upgraded manufacturing facilities and rewards production of formula sold in the U.S., addressing potential supply shortages and reducing dependence on foreign imports.

Key Provisions

• Domestic Infant Formula Manufacturing Investment Credit (New Section 48F of the Internal Revenue Code):
• Provides a 30% tax credit on qualified investments in "eligible property" (tangible items like equipment necessary for manufacturing, depreciable over time) placed in service as part of a "qualifying infant formula manufacturing project."
• Projects must re-equip, expand, or establish U.S. facilities for producing "eligible infant formula" (formula legally sold in the U.S. and made domestically).
• Eligible taxpayers are those with global revenue of $750 million or less in the prior year (with rules treating related companies as one entity).
• Requires certification from the Secretary of the Treasury: Applications must show at least 50% of output sold in the U.S. within the first year; certifications valid for 3 years to start operations.
• Limits: Up to $150 million per project; total program capped at $750 million; no new projects after 10 years.
• Recapture rules: If conditions fail (e.g., not enough U.S. sales or property no longer qualifies) within 1 year of startup, the credit is clawed back with interest.
• Credits are transferable (can be sold to others) or electable for direct payment from the government.

• Infant Formula Production Credit (New Section 45BB of the Internal Revenue Code):
• Offers $2 per pound credit (with conversion rules for liquid forms) for eligible infant formula manufactured and sold for use in the U.S.
• Qualified taxpayers: Same revenue limit as above, or those who received this credit previously.
• Annual limit: 18 million pounds per taxpayer; available for up to 5 years starting from the first year of credit use.
• Cannot claim if the investment credit was used for the same facility.
• Also transferable or electable for direct payment.

• General Rules:
• Both credits integrate into the existing general business credit system.
• Applies to projects starting construction (investment credit) or formula produced (production credit) after enactment.
• Secretary of the Treasury to issue guidance, including public disclosure of awards and potential reallocation of unused credits after 4 years.

Significant Changes to Existing Law

• Adds entirely new tax credit sections (48F and 45BB) to the Internal Revenue Code, expanding investment and production incentives beyond current clean energy or manufacturing credits.
• Makes these credits transferable (via Section 6418) and eligible for elective payments (via Section 6417), allowing non-taxable entities like startups to benefit directly— a feature increasingly common in recent tax laws but not universal.
• Excludes nonrecourse financing (loans without personal liability) from the credit base to prevent inflated claims.
• Introduces revenue caps and certification processes tailored to infant formula, differing from broader manufacturing credits without such industry-specific or size-based restrictions.

Potential Impacts

• Government Agencies: The Treasury Department and IRS will need to create and manage a certification program within 180 days, review allocations after 4 years, and handle recapture/enforcement, potentially increasing administrative workload and costs.
• Citizens: Could improve access to reliable, domestically made infant formula, benefiting parents and infants by enhancing supply chain security and possibly lowering prices through increased competition.
• International Relations: May reduce U.S. reliance on imported formula (e.g., from Europe or Asia), potentially straining trade ties with exporters but aligning with "Buy American" policies; no direct tariffs or sanctions imposed.
• Economy: Targets smaller manufacturers, fostering job creation in U.S. facilities and stimulating rural or industrial areas, though total credits are capped to limit federal spending (estimated under $1 billion overall).

Main Stakeholders Affected

• Infant Formula Manufacturers: Primarily smaller U.S.-based companies (revenue under $750 million) seeking to build or expand; larger global firms may be excluded or aggregated out.
• Consumers and Families: Parents relying on infant formula for nutrition, potentially gaining from a more stable domestic supply.
• Government: U.S. Treasury and IRS for program administration; broader federal budget via tax expenditures.
• Related Industries: Suppliers of manufacturing equipment and ingredients, who may see increased demand.

Notable Legal, Constitutional, or Political Implications

• Legal: Introduces strict certification and recapture mechanisms to ensure credits support genuine U.S. production, with public disclosure promoting transparency but raising privacy concerns for applicants. Recapture with interest acts as a penalty, enforceable like other tax adjustments, but litigation delays could trigger reallocations.
• Constitutional: No apparent challenges; tax incentives are a standard congressional power under Article I, Section 8, and the revenue cap avoids equal protection issues by applying uniformly.
• Political: Supports bipartisan goals of domestic manufacturing and food security (introduced by Republicans and Democrats), echoing post-2022 formula shortage responses. Could influence trade policy by prioritizing U.S. output, but the 10-year sunset provides a trial period without long-term commitments.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Nunn, Zachary [R-IA-3]

Cosponsors (4)

Rep. Houlahan, Chrissy [D-PA-6], Rep. DeLauro, Rosa L. [D-CT-3], Rep. Balderson, Troy [R-OH-12], Rep. Tran, Derek [D-CA-45]

Recent Actions

• 2025-03-10: Referred to the House Committee on Ways and Means.
• 2025-03-10: Introduced in House
• 2025-03-10: Introduced in House

Bill Versions

• Infant Formula Made in America Act of 2025 — issued 2025-03-10 — PDF (15 pages)